Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes

نویسنده

  • David M. Kreps
چکیده

Bertrand’s model of oligopoly, which gives per$ectly competitive outcomes, assumes lhat: (1) there is competition overprices and (2) production follow dle reulizafion of demand. We show that both of ~heseassumption are required. Moreprecisely, consider a two-stage oligopoly game where,~rst, there is simultaneous produc~ion,and, second, ajierproduction levels are made public, there i~price competition. Under mild assumption about demand, the unique equilibrium outcome is the Cournot outcome, This illustrates that solutions to oligopoly games depend on both the strategic variables employed and the contex~(game form) in which those variables are employed,

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تاریخ انتشار 1998